tv Bloomberg Business Week Bloomberg July 21, 2019 4:00pm-5:00pm EDT
the cover figure on this week. fed chairman jay powell. joel: jay powell is probably the most important person in the world of finance. he has the financial institution that is probably the most important whenever institution anywhere in the world. for a year now, he has been the target of trump's twitter either. trump just once lower rates, lower rates, lower rates. wants lower rates, lower rates, lower rates. carol: they have been an agency for so long. we are wondering if they will remain that way. >> the market thinks they will
be a rate cut. the bigger story is one that we wanted to ask chris to dig into. for a year now, we have been living through this tension between trump and how. more trump than powell. it is one-sided. chris got to is that there is not much of an effect on policy standpoint for the fed. this will take a few months to evolve. this could be radical. shelton is nominated for the fed. we don't know how that will go nor what you might do if she gets into that seat. >> a good list -- it could last the rest of the year.
financialt the ability of the whole world. jay powell has been the stoic figure. carol: it is so timely and it is a must read for this week. joe: i talked with chris condon about the cover story. >> judy shelton is a former economic adviser to president trump. she is currently a director at the european bank for reconstruction and development. a position that was appointed by the president. she could be seen as one of two things. despite her past hard money views, she has said that she would want to lower interest rates as quickly as possible if she became a fed governor. that does not really fit with
background, thinking and writing about monetary policy and economics. fan of hardhe is a money, that is associated with very low inflation. philosophically, she does not believe that there should be a central bank setting a benchmark interest rate for the financial markets. joe: i want to stop you there. that alone is a very provocative stance to say the least. the idea that you have someone coming in to the fed that would if not his very existence but all the key roles that we have traditionally seen it play. how would that affect the day-to-day operations and the
deliberative process of the fed? chris: sometimes an orthodox person-- unorthodox comes into the fed with different views. that is not judy shelton. she has no play in the debates that the fed holds around the table. she doesn't believe that fed should be happening. she is interested in a debate that is at an entirely different level. she does not believe in every -- having a central bank set an interest rate. she would rather money be considered or tied to a fixed unit of measure like a weight in gold. this is a debate that was settled a long time ago by the people who were involved in the central bank and around the world. she wants to revert back to an older debate. that would turn the fed on its head. as a governor, that would not be
that disruptive. one governor does not have that much influence at the fed. think of it in this context in which the president obviously for thet disdain current fed chair. you like to remove them if he could. if a person like judy shelton is installed as governor, she would be seen as a chair in waiting. is's say that trump reelected and powell's term expired, she could be named the next fed chair. from could demote powell the chair. be thatlton would not disruptive. would threaten to turn that institution upside down as the
chair of the fed. joe: one of the things that you addressed, you talked about the notion that chair jay powell may say forget it, i am out. that seems unlikely based on the people that you have talked to. chris: not a single person that i spoke to who knows jay powell pretty well thought that was even a remote possibility. he is very squarely focused on the job he has in front of him. he can make plenty of mistakes in the job but he is very clearly not the type of person that is going to walk away. that not in a position serves at the chair of the president. inre are protections found the law and the constitution. it is not entirely clear in that argument. is notline, jay powell seen as the type of person that will wilt under this kind of
welcome back to bloomberg businessweek, i am carol massar. joe: i am jason kelly. join us on the radio. carol: you can also find us on our mobile app. a fascinating look at the cannabis industry. it is growing and getting level. joe: stories focus about the new green supply chain. it is global and the exploding market for cbd pet products.
carol: they are called stoner pets. joe: also the struggles that women find when they try to rise in the week business. iness. bus hemp is used for textiles and they got lumped in with marijuana. the latest is the farm bill, shepherded by mitch mcconnell. he wanted the farmers who are having trouble with tobacco to sell hemp. that is what is driving a lot of this. there is no federally legal cannabis. is notthe money complicated like it is for the other side of the cannabis market. >> the answer is still a little complicated. much less than marijuana. there are 11 states for
marijuana, where it is legal. the federal government still considers marijuana to be like heroin or cocaine. completely banned. some of those restrictions are now gone. there is a federal market for help. you can grown in kentucky and send it to oregon. there is a federal interstate commerce market in hemp. that is why a lot of focus is on hemp right now. carol: as it becomes more traditional, some of the pitfalls come along, that includes the ability for women to be in this industry. when we started out, there were a lot of women in cannabis. they were prominent and in higher positions. yvonne: there was a narrative that this would be -- craig: there would be a narrative that this would be a great industry for women. we thought that women were going to thrive. carol: no glass ceiling.
craig: it was mainly startups. the state took them to outside investment. anybody had their fair crack. there was this narrative going for the first couple of years that this would be a great place for women. now we have public companies, wall street has showed up. it is starting to like everything else. it is more white and more mail. it is a problem for the female executives. a lot of them have been pushed aside. joe: one of the most fascinating places this is going, stoner pets. using cannabis to help your dog in a meaningful way. craig: the anecdotal stories are pretty powerful. you talk to these people, my dog was 14 years old. jump, but not eat, around, i started giving it cannabis and a couple of weeks later it was better.
people are using cbd as well. there is very little medical research on this. it was bad for a century. there wasn't universities studying this stuff. cbd floods into the market all of a sudden. people are hearing anecdotally that it is helping buster. people are trying it, is it a placebo effect? people think that but who is to argue with these powerful stories? the pet market story has been that people want organic food for their pets. all of the trends we think about in the food and beverage has shown up in pets. cbd is the premium ingredient. 7% was coming from the pet market. that is significant. craig: it is. a lot of people think that the cbd market will be bigger than the marijuana market.
there are a lot of people and dogs that can't be stoned. you can take cbd before work, it helps me relax and helps me sleep. the testing is very driving at this point. drivinget thing is very at this point. joe: where are they on all of this? it feels like everybody is coaxng to the pepsi's, the -- coke's. carol: johnson & johnson. is legal by law. not done the regulations. it is not technically legal cbd innow to put cd -- food and drink. they are waiting for these
copies to come out and say that we think the average adult can have this amount of cbd her day. that has not happened. as is being treated like a health supplement. there is not a ton of regulation. going tooys, they are wait for the fda to say the step is safe and legal and here is what you can do with it. >> in the meantime, we are seeing a global supply chain being created. >> the u.s. market for cbd is exploding. what is happening is that around the world, you're getting legal cannabis markets in places you could have never imagined two or three years ago. everyone is looking to the u.s.. and is the next buzzy radiant. coca-cola will want it. coca-cola will-- want it. hemp is becoming a thing at the center of what is the first ever legal global cannabis supply
chain. joe: taylor joins us now. let's talk cannabis by the numbers. the stocktracking performance of the big companies. take a look at this. they had a lot of people concerned about the supply chain. we have come off those heights a little bit. upe of the companies are 40-150% in the past few years. there has been more focused on these companies. is the next phase of growth in the pet sector? is possibly going to be more scrutiny on these companies. carol: coming up, betsy devos came to washington as a government outsider. how she is handling the job know that she is on the inside. joe: a legal case that has ramifications on washington and
joe: welcome back to bloomberg businessweek. anderson county. -- jason kelly. you can listen to us on the stations. jason: this file is also of president donald trump has many controversial cabinet members. talking this week about betsy devos. carol: she had no government experience and -- but she was a wealthy activist who tried to ban charters schools.
jason: devin leonard has tracked a lot of the cabinet. he talked to us about how the boss has measured up. has measured up. >> she went to calvin college. brother -- father invented the sun visor. s.e married dick devos was like a, this royal wedding. out that should point prince, her brother is eric prince. home -- whole own story. they are very conservative.
devoss became very involved in conservative causes, especially with the focus on education. this furtherance of a lightly regulated charter sector. they had mixed results for children. carol: talk about her ministry is and what she has been able to get done. -- her not sound like administration and what she has been able to get done. it doesn't, she has had a lot of support from the white house. devin: the federal government a percent, maybe a little less than the trillion dollars that the federal
-- the countryds spends on k-12th education. they oversee the student loan program. that is a $1 trillion program. that is where she has had the most impact. buzzing -- carol: has she made progress? devin: she had a little victory in the tax cuts and jobs bill. got the amendment passed. that would enable us to put money away in our college savings account to spend on private school. that is about it. she has pushed for a bigger
school choice plan. house democrats are not completely against it. point, not ao your lot of people in the trump administration are interested in education. >> jeffrey epstein has pled not guilty to sexual misconduct and conspiracy charges in new york. rising about how he built a fortune on wall street and connections in washington. jason: tom has been covering the story. he has been putting together 's orbit.pstein how do you get your arms around a fast-moving and pretty complicated story? >> corporate america, high society, british royals. is a confirmation of all
these new stories that have been flying around. carol: i think the story is disturbing and fascinating on many levels. be on the allegations and charges that have been levied against him. how did he get all these relationships? how did he accumulate so much money? that is what you're beginning to at.up -- >> this man has been able to keep connections with billionaires, celebrities who are socialites. despite 10 years ago being known as tied to sex offenses. that continues to follow everybody. to givehe feel the need so much control over his financial affairs to a character
like jeffrey epstein? we really don't know what his business was about. we don't know how much he accrued so much wealth and connections. what we do know and what this points out is how far the web extended. the question remains like how were these people connected? why are they all in this orbit? carol: you lay out the assets --t he has obviously jason: jason: you lay out the assets that he has. they are trying to understand where he came from. they also want to know how they're going to disposable that and keep him from leveraging that. >> he has two private islands in the u.s. virgin islands. he had this infamous manhattan townhouse.
paris, a village in florida. all of these were up for grabs for the prosecutors if they so inclined. the question is there are a lot of interesting things going on here. he bought this second virgin islands in 2016. what was going on there? why do government allow that to happen? -- why did government allow that to happen? he has a helicopter. one of those jets and helicopters are for sale. >> nobody knows amazon like brad. he is the person to dig into jeff bezos's next attempt to slice into retail. uber might want to take a page out of jeff bezos ' book. carol: this is bloomberg businessweekcarol: ♪.
jason: welcome back to bloomberg businessweek. i am jason kelly. carol: i am carol massar. still ahead, businessweek talk. solutionus, a special section called prognosis, meeting health care issues head on. carol: it has been 15 years since the first moon landing. how we got there. jason: we begin in the features
section. the company that reinvented retail are not done. this is called amazon go. major cities in america, you may understand it. we went to the guy that literally wrote the book on amazon and bezos. >> there are 13 of them now. san francisco, seattle, chicago and new york. they are adding them slowly. it is best described as like a convenience store where you can pick up lunch or breakfast, a smattering of grocery store items. the big innovation and the reason things -- amazon has been working on this for so long is there are no cashiers. you walk in, you scan your app, you pick up what you need and you walk out. up, or medically,
there are dozens and dozens of cameras that are watching you in tracking what you do in the store to see what you're taking. they can charge you for it. this is the big bet to revolutionize retail. >> talk to us about how this works. moving products around, some things on the wrong shelves. >> that is something that we were curious about when we started to research this story. from followingw amazon is they had worked on this for an extraordinarily long time. probably longer than most companies would ever. they started this in 2012. jeff bezos said go find a way to do something unique in retail. they landed on the cashier less store. they tried to remove the lines
of the checkout. having customers scan barcodes, all sorts of things. what they landed on was a combination of computer vision sensors. there are cameras on the ceilings. there are cameras behind the shelves. there are also weight sensors in the shelves so they can combine the smattering of input to figure out what has been taken and carried away. thisthe other thing is most election of cases where there was some confusion. the computers get confused. contractors and amazon employees are looking to go did he pick up a chicken panini? carol: that sounds expensive to do. that sounds like a lot of technology and you still need people doing things. that sounds expensive. sourcese of our
described it as the most expensive r&d project and amazon history. they have spent millions of dollars on it. this gets to how amazon operates and how we should look at this store. it is a small convenience store. obviously, they are thinking about it as something much more. we are reporting a 10 or 15,000 foot store in seattle in the capitol hill neighborhood. that is going to be a much larger version. clearly, they are looking at this. replacessarily to cashiers or whole food but to create a new customer service in retail. the ghost store is a good first step. isol: the potential prize there is a $12 trillion global grocery market, they want a
piece of it. what they do in their planning sessions is they go how do we get to 500 billion? walmart is still much larger in terms of annual sales. how do we get to that level? they will not do that unless they cracked that 90% of all retail that happened in physical stores. about bezoslk more and even brad's on struggles. own struggles. carol: amazon has all that money to pour into the project because of the decision to branch out into web services. grows into a fast-moving profit stream. uber would be smart to do something similar. ofthere is aws hiding inside
uber. they have spent a decade honing their own technology to match people who want rides with all of these drivers around the world. it has mapping and routing and logistics technology. that is all really hard to do. the chief technology officer has thought about this. i thought that was interesting. >> he said that uber has lots of other business ideas that are on the front burner but this idea of doing aws style technology is on the back burner. he brought it up almost unannounced and made the comparison to aws on its own. center in thend market. is not quiter aws there. aws -- nk
everybody needs computing. they all need computing. that every company in the world has an uber like business model. that is a big reason why it may not work. >> what is interesting about aws is the introduction of that changed radically the landscape of some of the other big technology companies. these are the strategies they met as well. it would be interesting to see if google got into this business into this uber got business. itself, maybe it does not exist if it uses aws. it might have used an outdated cloud sourced computer model. categorieseate whole of companies that would not be possible. jason: of next, we will talk a
jason: [bloomberg businessweek. join us on the video from 2:00 p.m. to 5:00 p.m.. you can find us online and on our mobile app. also, our issues of interview with antonio theory. antonio. he took over as the ceo back in 2018. carol: hpe recently introduced the prescription model, carving out a niche in a highly competitive space.
jason: we spoke to him about his plan. >> we believe the future will be data driven. the cloud has to move closer and closer where the data is being generated. that is the edge. that is where we live and work. that is where the action is. we have a clear strategy for that edge. will be a secure connection. this moves the cloud computing closer and closer. is cheaper to move the cloud toward where the data is. we have made a bold statement. carol: how much pressure are you feeling from the likes of amazon google?
i know you have a partnership with google but some of these companies that have really put their stake in the ground when it comes to the cloud space, much pressure do you feel? companies have moved to the crowd. when you look at the enterprise that, what we see is production lots have been via the cloud. data,he sheer amount of the customer realizes it is cheaper for them to run it on their premises. realize there will be on the cloud. that will be the war as we go along. we will try to mobilize that premise to provide a fully integrated experience in a true hybrid cloud approach. it will help customers decide what is the right mix. ultimately, they have to decide
where they want the data to go. for us, we are embracing the public cloud. we are not fighting it as a competitive threat. carol: do you feel pressure from some of the other competitors out there? >> we compete with everyone. understandingr and strategy. we are making significant progress. >> you have done a lot of acquiring of companies. like anotherhing piece that you feel like you have to add on? >> then i just large companies but smaller companies. particularly in the space. if it makes sense for shareholders, we have a very structural disciplined approach.
obviously, more and more of this intelligence comes from the softer experiences that makes that infrastructure more intelligent, more autonomous right through connectivity. motivations tend to be a little erratic of late. if it makes sense, we will consider it. >> we'll see what comes out of the g20. you also have the white house pushing against other trade partners. view the trade wars that are underway and how they may impact you? you are in 172 countries. how is it changing how you run hpe? >> we have this problem together. i understand how we are thinking
about this. we have to work together to solve this problem. there has to be a fair approach to these trades. at the same time, we live in a global economy. the supply chains we have put in place over the last few decades are very sophisticated and complicated. and globalery large presence. we have been able to navigate through these challenges. we have been able to mitigate all of them. >> now to the special solutions section focusing on the critical global issue of health care. >> companies around the world are trying to bring innovation to the health care sector. we spoke with the editor about the stories in this week's issue. >> even before we were in the throes of this opioid crisis, the big question was what comes after opioids, what can we develop as a pain medicine and pain medicines and treatments that can really stepped in and take the place of opioids? the next big thing in pain has
been something people have been talking about for a long time. they are companies have had mixed success with it. we are looking at effort by a handful of startups that are -- taking testing on animals and pushing it forward. there is by some push -- some push by our government to speed up human trials. >> agents got a big push. >> exactly. it is exciting stuff, looking at , i think it is unlocking genes and dna. it is not gene therapy we are talking about but the underpinnings of a lot of what we need to deal with in order to get at developing more effective ones. pain is a tricky thing to get at. you don't want to eliminate pain entirely. we need to be aware of things happen to us. whether you are cut or burned, there are various
considerations. naomi, a reporter and one of our prognosis editors rick shine did of looking atjob what is happening with the startups. i think people will be surprised. >> a reminder that so much of what we understand about pain comes down to the brain rather -- the place -- thee has not been crisis is terrible. effective, they were very lucrative for the companies. we are putting them out. some of it may not be managed exactly the way it should have been. -- realsn't that will drive to find what was coming next. now it has become a priority.
welcome back to bloomberg businessweek. i am jason kelly. carol: i am carol massar. you can listen to us on the radio. you can listen to us in boston, new york, the bay area and london. carol: in pursuits this week, people have the scenes at an iconic american restaurant. jason: everybody who is anybody goes to eat sushi at nobu.
businessweek went there with a twist. >> we have this awesome journalist, brandon. he has been doing stunts where undercover at super great locations to see what it is like to be a butler at the plaza, to be a ski instructor at aspen, to be a cruise director on a giant ship. undercover o as an nobu.'d at >> they started in los angeles. nobu had a restaurant there. started --iro convinced him to come to new york. it is a big thing. this is a billion-dollar business. there are these hotels on the world. they are famous for celebrities hanging out there. d'sees what the maitre is all the intricate behavior
that happens from the restaurant side. also from the client side as well. in no good 57ked -- nobu 57. he saw tons of celebrities. he saw a-rod and j-lo on a date. he described the deceiving chart as a game of risk. -- they haveple relationships with a lot of the celebrities. they know who can sit with who. they have young staff who tells them that that is a youtube star. you can't see to that person near this person. it gets kind of intense. carol: the corner booths are coveted. >> there are four booths at one of the new nobus.
corner.there's a only so much you can do. people like their privacy and to not be seen. brandon said if you are seen as a celebrity in a restaurant, at nobu, it's because they want you to see them. >> what they're doing to celebrate and a look at how elvis reinvented himself and the las vegas show. >> let's finish up this week in the remarks section. this would be the effort to send a human being to the moon. we succeeded 50 years ago this weekend. apollo 11, the armstrong and the first lunar landing. jason: that one small step that we know about was the culmination of a huge private-public collaboration. what did this teach us about management? peter outlined this.
>> we said we made it, we got to the moon and now it is like it is not we, they. those people from long ago. now we somehow can't or at least we are not doing it. there is something embarrassing about celebrating this and neck when his them of americans walking on the moon. of anachronism americans walking on the moon. the technology of the 1960's was so primitive compared to the technology of today. particularly in the area of computers. the onboard computer in the apollo mission was so incredibly tiny.
there was no computer that today.ve that exists it got them to the moon. this is about the management. whether it is solving, curing cancer or fixing global warming. >> this all idea of coming together. they had a very clear objective. >> the person who established that was president john f. kennedy. he said a 1961 that the u.s. had a mission to land astronauts on the moon and bring them safely home by the end of the decade. that was audaciously ambitious. carol: here's what we will do and here is your timeframe. >> not universally lauded. especially as it went on and people spend more and more money. a seemed like a little bit of
full's errant in light of everything that was going on in the world. even in the country in the 1960's. >> there were incredible pressures working against this moon mission. , there the nasa people were 400,000 working on this at one point, because they had such a clear mission, there were able to put that aside and get going with this letter was. slide rules. carol: it was about pulling people together for one mission. >> it did not work flawlessly, not even then. 1960 7, 3agedy, astronauts died on the launching pad, that appeared to be a routine test. problemsed it back to
at north american aviation. james weber had not known about the problems there. that led to his resignation. , 67as a big blow at a time was getting pretty close to 1970. they pulled together and managed to get it done. carol: bloomberg businessweek is available on newsstands now. jason: what is your must-read? carol: what we heard from peter. takes usis story, it back 50 years ago and what it took to get a man on the moon. just these management lessons that can be learned. we have big problems out there. we can learn from back then. your must-read? jason: i love to talk bread about amazon. we got to spend some extra time with him. check that on our podcast.
emily: i'm emily chang and this is "the best of bloomberg technology" where we bring you all of our top interviews from this week in tech. coming up is tech on the hill. antitrust and cryptocurrency all under scrutiny this week. representatives from amazon, apple, google and facebook all on the defense. plus, netflix needs to get stranger. stock plunges after a whopping subscriber miss. analysts bet on new seasons of shows like "stranger thin